##### Table of Contents



FORM 10-Q
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended December 31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 1-10986
 MISONIX, INC.
 (Exact name of registrant as specified in its charter)
 New York
    
    11-2148932(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)1938 New Highway, Farmingdale, NY
    
    11735(Address of principal executive offices)
    
    (Zip Code)
 (Registrants telephone number, including area code)
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ
  Class of Common Stock
    
    Outstanding at
February 9, 2011Common Stock, $.01 par value
    
    7,001,369




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##### 



MISONIX, INC.
 INDEX
 PagePart I  FINANCIAL INFORMATIONItem 1. Financial Statements:Consolidated Balance Sheets as of
December 31, 2010 (Unaudited) and June 30, 2010
    
    
    3Consolidated Statements of Operations
Six months ended December 31, 2010 and 2009 (Unaudited)
    
    
    4Consolidated Statements of Operations
Three months ended December 31, 2010 and 2009 (Unaudited)
    
    
    5Consolidated Statement of Stockholders Equity
Six months ended December 31, 2010 (Unaudited)
    
    
    6Consolidated Statements of Cash Flows
Six months ended December 31, 2010 and 2009 (Unaudited)
    
    
    7Notes to Consolidated Financial Statements (Unaudited)
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    19Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4. Controls and Procedures
    
    
    22Part II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    22Item 1A. Risk Factors
    
    
    22Item 6. Exhibits
    
    
    22Signatures
    
    
    23Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 MISONIX INC. and Subsidiaries
 
 Consolidated Balance Sheets
 December 31,
    
    
    June 30,2010
    
    
    2010(Derived from Audited(Unaudited)
    
    
    Financial Statements)Current Assets:Cash
    
    $
    8,237,125
    
    
    $
    9,900,605Accounts receivable, less allowance for doubtful accounts of $116,178 and $123,346,
respectively
    
    
    2,290,466
    
    
    
    2,335,653Inventories, net
    
    
    3,745,148
    
    
    
    2,699,717Prepaid expenses and other current assets
    
    
    253,032
    
    
    
    515,427Notes receivable
    
    
    210,000
    
    
    
    1,075,105Total current assets
    
    
    14,735,771
    
    
    
    16,526,507Property, plant and equipment, net
    
    
    769,147
    
    
    
    500,215Goodwill
    
    
    1,701,094
    
    
    
    1,701,094Other assets
    
    
    2,244,076
    
    
    
    1,730,339Total assets
    
    $
    19,450,088
    
    
    $
    20,458,155Liabilities and stockholders equityCurrent liabilities:Notes payable
    
    $
    10,701
    
    
    $
    177,679Accounts payable
    
    
    1,570,001
    
    
    
    888,654Other accrued expenses and other current liabilities
    
    
    950,525
    
    
    
    1,000,523Total current liabilities
    
    
    2,531,227
    
    
    
    2,066,856Capital lease obligations
    
    
    6,605
    
    
    
    14,274Deferred lease liability
    
    
    5,617
    
    
    
    Deferred income
    
    
    203,367
    
    
    
    250,739Total liabilities
    
    
    2,746,816
    
    
    
    2,331,869Commitments and contingenciesStockholders equity:Common stock, $.01 par value-shares authorized 20,000,000; 7,079,169 issued,
and 7,001,369 outstanding
    
    
    70,792
    
    
    
    70,792Additional paid-in capital
    
    
    25,633,715
    
    
    
    25,502,717Accululated deficit
    
    
    (8,588,811
    )
    
    
    (7,034,799
    )Treasury stock, 77,800 shares
    
    
    (412,424
    )
    
    
    (412,424
    )Stockholders equity
    
    
    16,703,272
    
    
    
    18,126,286Total liabilities and stockholders equity
    
    $
    19,450,088
    
    
    $
    20,458,155
 See Accompanying Notes to Consolidated Financial Statements.
  3




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MISONIX INC. and Subsidiaries
 
 Consolidated Statements of Operations
 (Unaudited)
 For the six months endedDecember 31,2010
    
    
    2009Net sales
    
    $
    6,681,677
    
    
    $
    5,779,191Cost of goods sold
    
    
    3,157,810
    
    
    
    3,264,275Gross profit
    
    
    3,523,867
    
    
    
    2,514,916Operating expenses:Selling expenses
    
    
    2,019,700
    
    
    
    1,978,486General and administrative expense
    
    
    2,327,287
    
    
    
    2,803,164Research and development expenses
    
    
    888,779
    
    
    
    946,040Total operating expenses
    
    
    5,235,766
    
    
    
    5,727,690Loss from operations
    
    
    (1,711,899
    )
    
    
    (3,212,774
    )Other income (expenses):Interest income
    
    
    75
    
    
    
    28,077Interest expense
    
    
    (5,079
    )
    
    
    (45,659
    )Royalty income and license fees
    
    
    351,702
    
    
    
    308,883Royalty expense
    
    
    (40,259
    )
    
    
    (65,056
    )Other
    
    
    39,833
    
    
    
    (8,711
    )Total other income
    
    
    346,272
    
    
    
    217,534Loss from continuing operations before income taxes
    
    
    (1,365,627
    )
    
    
    (2,995,240
    )Income tax (benefit)
    
    
    42,100
    
    
    
    (1,182,677
    )Net loss from continuing operations
    
    
    (1,407,727
    )
    
    
    (1,812,563
    )Discontinued operations:Net (loss) income from discontinued operations net of
tax of $0 and $470,397, respectively
    
    
    (146,285
    )
    
    
    765,217Net loss from sale of discontinued operations net of tax of
$0 and $957,937, respectively
    
    
    
    
    
    
    (112,819
    )Noncontrolling interest in discontinued operations, net of income tax
    
    
    
    
    
    
    41,340Total net (loss) income from discontinued operations
    
    
    (146,285
    )
    
    
    693,738Net loss attributable to Misonix, Inc. shareholders
    
    $
    (1,554,012
    )
    
    $
    (1,118,825
    )Net loss per share from continuing operations attributable to Misonix, Inc.
shareholders  Basic
    
    $
    (0.20
    )
    
    $
    (0.26
    )Net (loss) income per share from discontinued operations  Basic
    
    
    (0.02
    )
    
    
    0.10Net loss per share attributable to Misonix, Inc. shareholders  Basic
    
    $
    (0.22
    )
    
    $
    (0.16
    )Net loss per share from continuing operations attributable to Misonix, Inc.
shareholders  Diluted
    
    $
    (0.20
    )
    
    $
    (0.26
    )Net (loss) income per share from discontinued operations  Diluted
    
    
    (0.02
    )
    
    
    0.10Net loss per share attributable to Misonix, Inc. shareholders  Diluted
    
    $
    (0.22
    )
    
    $
    (0.16
    )Weighted Average Shares  Basic
    
    
    7,001,369
    
    
    
    7,001,369Weighted Average Shares  diluted
    
    
    7,001,369
    
    
    
    7,001,369
 See Accompanying Notes to Consolidated Financial Statements
  4




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MISONIX INC. and Subsidiaries
 
 Consolidated Statements of Operations
 (Unaudited)
 For the three months endedDecember 31,2010
    
    
    2009Net sales
    
    $
    3,423,689
    
    
    $
    3,148,174Cost of goods sold
    
    
    1,537,107
    
    
    
    1,642,382Gross profit
    
    
    1,886,582
    
    
    
    1,505,792Operating expenses:Selling expenses
    
    
    1,054,693
    
    
    
    1,058,879General and administrative expenses
    
    
    1,109,482
    
    
    
    1,490,484Research and development expenses
    
    
    428,285
    
    
    
    523,571Total operating expenses
    
    
    2,592,460
    
    
    
    3,072,934Loss from operations
    
    
    (705,878
    )
    
    
    (1,567,142
    )Other income (expense):Interest income
    
    
    25
    
    
    
    14,052Interest expense
    
    
    (1,438
    )
    
    
    (17,571
    )Royalty income and license fees
    
    
    172,587
    
    
    
    152,260Royalty expense
    
    
    (20,916
    )
    
    
    (65,056
    )Other
    
    
    (5,576
    )
    
    
    (18,875
    )Total other income
    
    
    144,682
    
    
    
    64,810Loss from continuing operations before income taxes
    
    
    (561,196
    )
    
    
    (1,502,332
    )Income tax (benefit)
    
    
    4,000
    
    
    
    (936,913
    )Net loss from continuing operations
    
    
    (565,196
    )
    
    
    (565,419
    )Discontinued operations:Net income from discontinued operations net of tax of $0 and
$0, respectively
    
    
    29,030
    
    
    
    237,724Net income from sale of discontinued operations net of tax of
$0 and $0, respectively
    
    
    
    
    
    
    82,897Noncontrolling interest in discontinued operations, net of income tax
    
    
    
    
    
    
    21,085Total net income from discontinued operations
    
    
    29,030
    
    
    
    341,706Net loss attributable to Misonix, Inc. shareholders
    
    $
    (536,166
    )
    
    $
    (223,713
    )Net loss per share from continuing operations attributable to Misonix, Inc.
shareholders  Basic
    
    $
    (0.08
    )
    
    $
    (0.08
    )Net income per share from discontinued operations  Basic
    
    
    0.00
    
    
    
    0.05Net loss per share attributable to Misonix, Inc. shareholders  Basic
    
    $
    (0.08
    )
    
    $
    (0.03
    )Net loss per share from continuing operations attributable to Misonix, Inc.
shareholders  Diluted
    
    $
    (0.08
    )
    
    $
    (0.08
    )Net income per share from discontinued operations  Diluted
    
    
    0.00
    
    
    
    0.05Net loss per share attributable to Misonix, Inc. shareholders  Diluted
    
    $
    (0.08
    )
    
    $
    (0.03
    )Weighted Average Shares  Basic
    
    
    7,001,369
    
    
    
    7,001,369Weighted Average Shares  diluted
    
    
    7,001,369
    
    
    
    7,001,369
 See Accompanying Notes to Consolidated Financial Statements
  5




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MISONIX, INC and Subsidiaries
 
 Consolidated Statements of Stockholders Equity
 (Unaudited)
 Six months ended December 31, 2010
 Common Stock$.01 Par value
    
    
    Treasury Stock
    
    
    Additional
    
    
    
    
    
    
    TotalNumber
    
    
    
    
    
    
    Number
    
    
    
    
    
    
    paid-in
    
    
    Accumulated
    
    
    stockholdersof shares
    
    
    Amount
    
    
    of shares
    
    
    Amount
    
    
    capital
    
    
    deficit
    
    
    equityBalance, June 30, 2010
    
    
    7,079,169
    
    
    $
    70,792
    
    
    
    (77,800
    )
    
    $
    (412,424
    )
    
    $
    25,502,717
    
    
    $
    (7,034,799
    )
    
    $
    18,126,286Net loss\ Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,554,012
    )
    
    
    (1,554,012
    )Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    130,998
    
    
    
    
    
    
    
    130,998Balance, December 31, 2010
    
    
    7,079,169
    
    
    $
    70,792
    
    
    
    (77,800
    )
    
    $
    (412,424
    )
    
    $
    25,633,715
    
    
    $
    (8,588,811
    )
    
    $
    16,703,272
 See Accompanying Notes to Consolidated Financial Statements.
  6




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MISONIX, INC and Subsidiaries
 
 Consolidated Statements of Cash Flows
 (Unaudited)
 For the six months endedDecember 31,2010
    
    
    2009Operating activitiesNet loss from continuing operations
    
    $
    (1,407,727
    )
    
    $
    (1,812,563
    )Adjustments to reconcile net loss to net cash used in continuing
operating activities:Depreciation and amortization and other non-cash items
    
    
    172,374
    
    
    
    204,775Bad debt expense
    
    
    (24,022
    )
    
    
    31,525Deferred income tax benefit
    
    
    (2,086
    )
    
    
    (788,734
    )Loss on disposal of property, plant and equipment
    
    
    (21,301
    )
    
    
    1,017Stock-based compensation
    
    
    130,998
    
    
    
    140,386Deferred income
    
    
    (25,728
    )
    
    
    (12,156
    )Deferred lease liability
    
    
    5,617
    
    
    
    (19,302
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    55,826
    
    
    
    1,072,863Inventories
    
    
    (785,993
    )
    
    
    502,044Income taxes
    
    
    (15,359
    )
    
    
    (103,608
    )Prepaid expenses and other current assets
    
    
    13,253
    
    
    
    (253,747
    )Accounts payable and accrued expenses
    
    
    113,711
    
    
    
    210,693Other
    
    
    215,533
    
    
    
    (835,010
    )Net cash used in operating activities
    
    
    (1,574,904
    )
    
    
    (1,661,817
    )Investing activitiesAcquisition of property, plant and equipment
    
    
    (87,058
    )
    
    
    (833,763
    )Acquisition of assets from Aesculap
    
    
    (800,000
    )
    
    
    Net cash used in investing activities
    
    
    (887,058
    )
    
    
    (833,763
    )Financing activitiesProceeds from short-term borrowings
    
    
    
    
    
    
    9,229,418Payments of short-term borrowings
    
    
    (166,978
    )
    
    
    (12,112,658
    )Principal payments on capital lease obligations
    
    
    (7,178
    )
    
    
    (6,679
    )Net cash used in financing activities
    
    
    (174,156
    )
    
    
    (2,889,919
    )Cash flows from discontinued operationsNet cash provided by operating activities
    
    
    (146,285
    )
    
    
    533,570Net cash provided by investing activities
    
    
    1,115,000
    
    
    
    11,200,000Net cash provided by discontinued operations
    
    
    968,715
    
    
    
    11,733,570Effect of exchange rate changes on cash
    
    
    3,923
    
    
    
    (6,456
    )Net (decrease) increase in cash
    
    
    (1,663,480
    )
    
    
    6,341,615Cash at beginning of period
    
    
    9,900,605
    
    
    
    3,415,813Cash at end of period
    
    $
    8,237,125
    
    
    $
    9,757,428Supplemental disclosure of cash flow information:Cash paid for:Interest
    
    $
    5,079
    
    
    $
    186,797Income taxes
    
    $
    42,100
    
    
    $
    63,763
 See Accompanying Notes to Consolidated Financial Statements.
  7




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MISONIX, INC. and Subsidiaries
 
 Notes to Consolidated Financial Statements
 Basis of Presentation
    Organization and Business
      8




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MISONIX, INC. and Subsidiaries
Notes to Consolidated Financial Statements
  Discontinued Operations
     9




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MISONIX, INC. and Subsidiaries
Notes to Consolidated Financial Statements
 st ®
   For the three months ended
    
    
    For the six months endedDecember 31,
    
    
    December 31,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenues
    
    $
    
    
    
    $
    102,471
    
    
    $
    
    
    
    $
    4,141,299Income/(loss) from
discontinued
operations, before tax
    
    $
    29,030
    
    
    $
    258,809
    
    
    $
    (146,285
    )
    
    $
    1,276,954Gain on sale of Labcaire
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    762,221Gain on sale of Sonora
    
    
    
    
    
    
    82,897
    
    
    
    
    
    
    
    82,897Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,428,334
    )(Loss) income from
discontinued operations, net of tax
    
    $
    29,030
    
    
    $
    341,706
    
    
    $
    (146,285
    )
    
    $
    693,738
 Reclassification
  Net Income (Loss) Per Share of Common Stock
   10




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MISONIX, INC. and Subsidiaries
Notes to Consolidated Financial Statements
  For the six months ended
    
    
    For the three months endedDecember 31,
    
    
    December 31,2010
    
    
    2009
    
    
    2010
    
    
    2009Basic shares
    
    
    7,001,369
    
    
    
    7,001,369
    
    
    
    7,001,369
    
    
    
    7,001,369Dilutive effect of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Diluted shares
    
    
    7,001,369
    
    
    
    7,001,369
    
    
    
    7,001,369
    
    
    
    7,001,369
  Comprehensive Loss
  Stock-Based Compensation
     11




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MISONIX, INC. and Subsidiaries
Notes to Consolidated Financial Statements
  For the six months endedDecember 31,2010
    
    
    2009Risk-free interest rate
    
    
    3.9
    %
    
    
    3.1
    %Expected option life in years
    
    
    6.5
    
    
    
    6.5Expected stock price volatility
    
    
    78.3
    %
    
    
    81.9
    %Expected dividend yield
    
    
    0
    %
    
    
    0
    %Weighted-average fair value of options granted
    
    $
    1.49
    
    
    $
    2.02
   OptionsWeightedWeighted
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateNumber of
    
    
    Exercise
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    Price
    
    
    Life (years)
    
    
    Value (a)Outstanding as of June 30, 2010
    
    
    1,848,510
    
    
    $
    4.99
    
    
    
    5.1Granted
    
    
    219,500
    
    
    
    1.82Forfeited
    
    
    (2,010
    )
    
    
    1.67Expired
    
    
    (330,450
    )
    
    
    7.34Outstanding as of December 31, 2010
    
    
    1,735,550
    
    
    
    4.15
    
    
    
    7.0
    
    
    $
    191,341Exercisable and vested at December 31, 2010
    
    
    1,256,163
    
    
    $
    4.93
    
    
    
    5.4
    
    
    $
    44,088Available for grant at December 31, 2010
    
    
    741,894
 (a)
    
    Intrinsic value for purposes of this table represents the amount by which the fair value
of the underlying stock, based on the respective market prices at December 31,
2010 or if exercised, the exercise dates, exceeds the exercise prices of the respective
options. Focus Surgery, Inc.
   12




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MISONIX, INC. and Subsidiaries
Notes to Consolidated Financial Statements
 Income Taxes
    Inventories
 December 31,
    
    
    June 30,2010
    
    
    2010Raw Material
    
    $
    2,616,505
    
    
    $
    1,997,730Work-in-process
    
    
    1,233,682
    
    
    
    947,924Finished goods
    
    
    481,203
    
    
    
    304,1684,331,390
    
    
    
    3,249,822Less Valuation Reserve
    
    
    586,242
    
    
    
    550,105$
    3,745,148
    
    
    $
    2,699,717
 Accrued Expenses and Other Current Liabilities
 December 31,
    
    
    June 30,2010
    
    
    2010Accrued payroll and vacation
    
    $
    414,205
    
    
    $
    455,052Accrued VAT and sales tax
    
    
    
    
    
    
    21,693Accrued commissions and bonuses
    
    
    140,000
    
    
    
    245,852Accrued professional and legal fees
    
    
    39,180
    
    
    
    24,176Royalty expense
    
    
    135,438
    
    
    
    103,162Foreign income tax payable
    
    
    
    
    
    
    18,676Deferred income
    
    
    45,645
    
    
    
    24,000Current maturities of capital lease obligations
    
    
    15,066
    
    
    
    14,533Other
    
    
    160,991
    
    
    
    93,379$
    950,525
    
    
    $
    1,000,523
  13




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MISONIX, INC. and Subsidiaries
Notes to Consolidated Financial Statements
 Commitments and Contingencies
  Business Segments
 TM
  Medical Device
    
    
    Laboratory and
    
    
    Corporate andProducts
    
    
    Scientific Products
    
    
    Unallocated
    
    
    TotalNet sales
    
    $
    5,454,823
    
    
    $
    1,226,854
    
    
    $
    
    
    
    $
    6,681,677Cost of goods sold
    
    
    2,259,003
    
    
    
    898,807
    
    
    
    
    
    
    
    3,157,810Gross profit
    
    
    3,195,820
    
    
    
    328,047
    
    
    
    
    
    
    
    3,523,867Selling expenses
    
    
    1,728,207
    
    
    
    291,493
    
    
    
    
    
    
    
    2,019,700Research and development expenses
    
    
    733,438
    
    
    
    155,341
    
    
    
    
    
    
    
    888,779General and administrative
expenses
    
    
    
    
    
    
    
    
    
    
    2,327,287
    
    
    
    2,327,287Total operating expenses
    
    
    2,461,645
    
    
    
    446,834
    
    
    
    2,327,287
    
    
    
    5,235,766Operating income (loss) from
continuing operations
    
    $
    734,175
    
    
    $
    (118,787
    )
    
    $
    (2,327,287
    )
    
    $
    (1,711,899
    )Net loss from
discontinued operations
    
    $
    (146,285
    )
    
    $
    
    
    
    $
    
    
    
    $
    (146,285
    )
  14




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##### Table of Contents



MISONIX, INC. and Subsidiaries
Notes to Consolidated Financial Statements
  Medical Device
    
    
    Laboratory and
    
    
    Corporate andProducts
    
    
    Scientific Products
    
    
    Unallocated
    
    
    TotalNet sales
    
    $
    4,497,526
    
    
    $
    1,281,665
    
    
    $
    
    
    
    $
    5,779,191Cost of goods sold
    
    
    2,291,238
    
    
    
    973,037
    
    
    
    
    
    
    
    3,264,275Gross profit
    
    
    2,206,288
    
    
    
    308,628
    
    
    
    
    
    
    
    2,514,916Selling expenses
    
    
    1,725,551
    
    
    
    252,935
    
    
    
    
    
    
    
    1,978,486Research and development expenses
    
    
    780,537
    
    
    
    165,503
    
    
    
    
    
    
    
    946,040General and administrative
expenses
    
    
    
    
    
    
    
    
    
    
    2,803,164
    
    
    
    2,803,164Total operating expenses
    
    
    2,506,088
    
    
    
    418,438
    
    
    
    2,803,164
    
    
    
    5,727,690Operating loss from continuing operations
    
    $
    (299,800
    )
    
    $
    (109,810
    )
    
    $
    (2,803,164
    )
    
    $
    (3,212,774
    )Net income from
discontinued operations
    
    $
    351,207
    
    
    $
    342,531
    
    
    $
    
    
    
    $
    693,738
  Medical Device
    
    
    Laboratory and
    
    
    Corporate andProducts
    
    
    Scientific Products
    
    
    Unallocated
    
    
    TotalNet sales
    
    $
    2,762,555
    
    
    $
    661,134
    
    
    $
    
    
    
    $
    3,423,689Cost of goods sold
    
    
    1,039,306
    
    
    
    497,801
    
    
    
    
    
    
    
    1,537,107Gross profit
    
    
    1,723,249
    
    
    
    163,333
    
    
    
    
    
    
    
    1,886,582Selling expenses
    
    
    907,693
    
    
    
    147,000
    
    
    
    
    
    
    
    1,054,693Research and development expenses
    
    
    352,161
    
    
    
    76,124
    
    
    
    
    
    
    
    428,285General and administrative
expenses
    
    
    
    
    
    
    
    
    
    
    1,109,482
    
    
    
    1,109,482Total operating expenses
    
    
    1,259,854
    
    
    
    223,124
    
    
    
    1,109,482
    
    
    
    2,592,460Operating income (loss) from
continuing operations
    
    $
    463,395
    
    
    $
    (59,791
    )
    
    $
    (1,109,482
    )
    
    $
    (705,878
    )Net loss from
discontinued operations
    
    $
    29,030
    
    
    $
    
    
    
    $
    
    
    
    $
    29,030
  Medical Device
    
    
    Laboratory and
    
    
    Corporate andProducts
    
    
    Scientific Products
    
    
    Unallocated
    
    
    TotalNet sales
    
    $
    2,494,242
    
    
    $
    653,932
    
    
    $
    
    
    
    $
    3,148,174Cost of goods sold
    
    
    1,196,539
    
    
    
    445,843
    
    
    
    
    
    
    
    1,642,382Gross profit
    
    
    1,297,703
    
    
    
    208,089
    
    
    
    
    
    
    
    1,505,792Selling expenses
    
    
    926,396
    
    
    
    132,483
    
    
    
    
    
    
    
    1,058,879Research and development expenses
    
    
    443,842
    
    
    
    79,729
    
    
    
    
    
    
    
    523,571General and administrative
expenses
    
    
    
    
    
    
    
    
    
    
    1,490,484
    
    
    
    1,490,484Total operating expenses
    
    
    1,370,238
    
    
    
    212,212
    
    
    
    1,490,484
    
    
    
    3,072,934Operating loss from
continuing operations
    
    $
    (72,535
    )
    
    $
    (4,123
    )
    
    $
    (1,490,484
    )
    
    $
    (1,567,142
    )Net income from
discontinued operations
    
    $
    199,214
    
    
    $
    142,492
    
    
    $
    
    
    
    $
    341,706
  15




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##### Table of Contents



MISONIX, INC. and Subsidiaries
Notes to Consolidated Financial Statements
  Three months ended December 31,
    
    
    Six months ended December 31,2010
    
    
    2009
    
    
    2010
    
    
    2009United States
    
    $
    2,517,688
    
    
    $
    2,642,750
    
    
    $
    4,884,400
    
    
    $
    4,787,804United Kingdom
    
    
    18,418
    
    
    
    66,599
    
    
    
    18,418
    
    
    
    67,341Europe
    
    
    320,567
    
    
    
    182,321
    
    
    
    728,240
    
    
    
    429,500Asia
    
    
    127,041
    
    
    
    77,109
    
    
    
    210,847
    
    
    
    240,530Canada and Mexico
    
    
    61,450
    
    
    
    8,805
    
    
    
    160,612
    
    
    
    59,861Middle East
    
    
    159,824
    
    
    
    88,962
    
    
    
    187,858
    
    
    
    88,962Other
    
    
    218,701
    
    
    
    81,628
    
    
    
    491,302
    
    
    
    105,193$
    3,423,689
    
    
    $
    3,148,174
    
    
    $
    6,681,677
    
    
    $
    5,779,191
 Fair Value of Financial Instruments
      December 31, 2010
    
    Carrying Amount
    
    
    Fair ValueCash and cash equivalents
    
    $
    8,237,125
    
    
    $
    8,237,125Trade accounts receivable
    
    
    2,290,466
    
    
    
    2,290,466Trade accounts payable
    
    
    1,570,001
    
    
    
    1,570,001Note receivable
    
    
    210,000
    
    
    
    210,000Note payable
    
    
    10,701
    
    
    
    10,701
 June 30, 2010
    
    Carrying Amount
    
    
    Fair ValueCash and cash equivalents
    
    $
    9,900,605
    
    
    $
    9,900,605Trade accounts receivable
    
    
    2,335,653
    
    
    
    2,335,653Trade accounts payable
    
    
    888,654
    
    
    
    888,654Notes receivable
    
    
    1,075,105
    
    
    
    1,075,105Note payable
    
    
    177,679
    
    
    
    177,679
  16




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##### Table of Contents



MISONIX, INC. and Subsidiaries
Notes to Consolidated Financial Statements
  Cash
  Trade Accounts Receivable
  Trade Accounts Payable
  Note Receivable
  Note Payable
  Non-financial assets and liabilities:
  Goodwill and Intangible Assets
     17




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##### Table of Contents



MISONIX, INC. and Subsidiaries
Notes to Consolidated Financial Statements
  Patents
    
    
    Customer RelationshipsJune 30, 2011
    
    $
    33,000
    
    
    $
    80,000June 30, 2012
    
    
    62,000
    
    
    
    160,000June 30, 2013
    
    
    58,000
    
    
    
    160,000June 30, 2014
    
    
    55,000
    
    
    
    160,000June 30, 2015
    
    
    50,000
    
    
    
    160,000Thereafter
    
    
    283,000
    
    
    
    40,000$
    541,000
    
    
    $
    760,000
 . Recent Accounting Pronouncements
     . Subsequent Events
   18




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
  Forward Looking Statements
   Net sales :
 Gross profit :
 Selling expenses :
 General and administrative expenses :
 Research and development expenses :
  19




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##### Table of Contents



Other income (expense) :
 Income taxes :
  Net sales :
 Gross profit :
 Selling expenses :
 General and administrative expenses :
 Research and development expenses :
 Other income (expense) :
 Income taxes :
  20




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##### Table of Contents



Liquidity and Capital Resources
   Off-Balance Sheet Arrangements
  Other
  New Accounting Pronouncements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
 Market Risk:
  Interest Rate Risk:
   21




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##### Table of Contents



Item 4. Controls and Procedures.
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  
 Part II- OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
  
 Item 6. Exhibits.
 Exhibit 31.1-
    
    Rule 13a-14(a)/15d-14(a) CertificationExhibit 31.2-
    
    Rule 13a-14(a)/15d-14(a) CertificationExhibit 32.1-
    
    Section 1350 Certification of Chief Executive OfficerExhibit 32.2-
    
    Section 1350 Certification of Chief Financial Officer
  22




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##### Table of Contents



SIGNATURES
   MISONIX, INC.(Registrant)By:
    
    /s/ Michael A. McManus, Jr.

Michael A. McManus, Jr.President and Chief Executive OfficerBy:
    
    /s/ Richard Zaremba

Richard ZarembaSenior Vice President, Chief Financial Officer,Treasurer and Secretary
  23